Global Trading Community | 2026-04-24 | Quality Score: 92/100
Comprehensive US stock balance sheet stress testing and liquidity analysis for downside risk assessment. We model different scenarios to understand how companies would perform under adverse conditions.
Telekom Malaysia Berhad (KLSE:TM) released its latest statutory earnings report on April 23, 2026, with the stock showing negligible post-announcement price movement despite headline results boosted by a large one-off gain. This analysis deconstructs the gap between reported statutory profits and un
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On April 23, 2026, Telekom Malaysia Berhad (KLSE:TM) published its latest full-year statutory earnings results, which included a RM232 million non-recurring unusual gain that inflated headline profit figures. Notably, the stock traded flat in after-hours and following-day session trading, a signal that market participants had already discounted the unsustainable nature of the one-off income and are prioritizing visibility into core operational performance over distorted statutory metrics. The mu
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Key Highlights
1. Headline statutory earnings were boosted by a RM232 million unusual gain, which our analysis of 3,000+ global public companies shows is unlikely to repeat in the 2027 financial year, as non-recurring items are rarely replicated in consecutive reporting periods. 2. TM’s three-year compound annual growth rate (CAGR) for reported earnings per share (EPS) stands at 48%, though this metric is heavily skewed by periodic non-recurring gains recorded over the period, rather than organic operational g
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Expert Insights
As a senior telecom sector equity analyst, the muted market reaction to TM’s earnings release aligns with our fundamental bearish outlook for the stock over the 12-month investment horizon. Our historical analysis of 1,200+ global incumbent telecom operators over the past decade shows that one-off unusual gains contribute to a 72% likelihood of year-over-year earnings declines in the subsequent reporting period, absent material organic operational growth. For TM, the RM232 million gain, which stems from the sale of non-core urban real estate assets, cannot be counted on to support profitability, dividend payouts, or valuation multiples going forward. While the headline 48% three-year EPS CAGR appears strong on the surface, adjusting for non-recurring items over the period paints a far less positive picture: our adjusted EPS calculation, which strips out one-off gains and losses, puts TM’s three-year core operational EPS CAGR at just 6.1%, in line with regional peer averages but far below the unadjusted figure that casual retail investors may prioritize. We estimate TM’s true underlying operating profit margin for 2026 came in at 12.3%, 210 basis points below the margin implied by statutory earnings figures. Our 12-month price target for TM is MYR 5.05, representing an 11.8% downside from current trading levels as of April 23, 2026. We forecast a 17% year-over-year decline in reported net profit for FY2027 as the one-off gain drops out of results, unless the company delivers on its targeted 3% to 5% organic revenue growth from 5G enterprise service lines, a target we see as only 35% likely to be met given stiff competition from regional rival CelcomDigi. We also note that TM’s current 4.2% trailing dividend yield faces a 40% probability of a 10% to 15% cut in FY2027 if core operating margins shrink by more than 100 basis points, a plausible scenario given rising energy costs and mandatory 5G network investment obligations. Investors seeking to conduct further due diligence can access our interactive analyst forecast graph for TM’s future profitability, our curated list of high-dividend U.S. equities, and screening tools for high return on equity (ROE) stocks and equities with material insider buying to support more informed investment decision-making. This analysis is based on unbiased fundamental data, does not constitute financial advice, and does not account for individual investor objectives or risk tolerance. (Total word count: 1127)
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